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Turning Marketing Performance into Real World Revenue Forecasting
One of the most challenging, yet critical tasks of modern marketers is to make clear associations between the dollars spent on any given effort and the resulting revenue that can be anticipated. In the past it was Sales’ responsibility to provide this forecast, based on being engaged in the early stages of the sales cycle, and having (somewhat) effective visibility to upcoming revenue expectations. Now that prospects’ product and service research has moved primarily to the internet, sales channel involvement begins in the later stages of the sales cycle, and thus pipeline estimates can be far from accurate. As a result, it’s now up to Marketing to provide more correct forecasting, on a consistent basis, and with a high level of precision.
When trying to correlate sales and marketing performance to actual revenue dollars, it’s key to appreciate your balance of performance across all marketing channels. Understanding the actual metrics resulting from ‘prospects to conversion’ analysis, evaluated by flow in and out of each stage of the sales cycle, provides an opportunity to directly correlate marketing impact with revenue dollars.
In order to make these associations with appropriate rigor, strategic visibility to cross-channel lead generation balance, and the opportunities derived from those efforts, needs to be made readily discoverable on an ongoing basis. Marketing channel performance must be tracked across all touch-points to identify meaningful interactions with key company influencers, and multi-touch attribution assigned for each resulting account-based interaction. Trends need to be analyzed over time, to gain an earlier understanding of the pipeline, and more accurately predict conversions from stage to stage.
Begin by identifying each type of marketing effort (for example, e-blasts, trade shows, pay-per-click advertising, webinars, content syndication, etc.) and following the number of prospects who enter the marketing funnel through each channel. Associate the total investment made for each source, the percentage of prospects that convert to leads, and the time it takes them to convert (AKA, velocity), alongside historical trending.
Visibility to the resulting metrics provides skilled marketing professionals with a credible “Lead to Opportunity” index, which ranks the value and impact of all marketing channels based on real world performance. This index can then be leveraged to provide insight into how each channel is performing, which channel yields the best results, what needs attention or improvement, and where future marketing dollars can best be directed.